Launched on 06/28/2013, the ALPS International Sector Dividend Dogs ETF (IDOG) is a smart beta exchange traded fund offering broad exposure to the Broad Developed World ETFs category of the market.
What Are Smart Beta ETFs?
For a long time now, the ETF industry has been flooded with products based on market capitalization weighted indexes, which are designed to represent the broader market or a particular market segment.
Market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns, and are a good option for investors who believe in market efficiency.
If you're the kind of investor who would rather try and beat the market through good stock selection, then smart beta funds are your best choice; this fund class is known for tracking non-cap weighted strategies.
By attempting to pick stocks that have a better chance of risk-return performance, non-cap weighted indexes are based on certain fundamental characteristics, or a combination of such.
This area offers many different investment choices, such as simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies; however, not all of these strategies can deliver superior results.
Fund Sponsor & Index
Because the fund has amassed over $221.86 M, this makes it one of the average sized ETFs in the Broad Developed World ETFs. IDOG is managed by Alps. Before fees and expenses, IDOG seeks to match the performance of the S-Network International Sector Dividend Dogs Index.
S-Network International Sector Dividend Dogs Index identifies five high yielding securities, based on regular cash dividends, in each of the ten Global Industry Classification Standard sectors and is rebalanced quarterly.
Cost & Other Expenses
When considering an ETF's total return, expense ratios are an important factor. And, cheaper funds can significantly outperform their more expensive cousins in the long term if all other factors remain equal.
Annual operating expenses for IDOG are 0.50%, which makes it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 5.60%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure that minimizes single stock risk, investors should also look at the actual holdings inside the fund. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
Looking at individual holdings, Pl Edp - Energias De Portugal Sa (EDP) accounts for about 2.42% of total assets, followed by Ln British American Tobacco Plc (BATS) and Danske Bank A/s (DANSKEDC).
The top 10 holdings account for about 22.09% of total assets under management.
Performance and Risk
So far this year, IDOG has lost about -3.28%, and was up about 8.14% in the last one year (as of 02/14/2020). During this past 52-week period, the fund has traded between $24.43 and $27.97.
IDOG has a beta of 0.83 and standard deviation of 11.86% for the trailing three-year period, which makes the fund a medium risk choice in the space. With about 51 holdings, it effectively diversifies company-specific risk.
ALPS International Sector Dividend Dogs ETF is not a suitable option for investors seeking to outperform the Broad Developed World ETFs segment of the market. Instead, there are other ETFs in the space which investors should consider.
Vanguard FTSE All-World ex-US ETF (VEU) tracks FTSE All-World ex US Index and the Vanguard FTSE Developed Markets ETF (VEA) tracks FTSE Developed All Cap ex US Index. Vanguard FTSE All-World ex-US ETF has $25.96 B in assets, Vanguard FTSE Developed Markets ETF has $78.75 B. VEU has an expense ratio of 0.09% and VEA charges 0.05%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Broad Developed World ETFs.
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.
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ALPS International Sector Dividend Dogs ETF (IDOG): ETF Research Reports
Vanguard FTSE All-World ex-US ETF (VEU): ETF Research Reports
Vanguard FTSE Developed Markets ETF (VEA): ETF Research Reports
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